22nd Nov 2018 10:07
LONDON (Alliance News) - Shares in spread betting and contracts-for-difference trading platform CMC Markets PLC fell Thursday as the company slashed its interim dividend on the back of a steep fall in profit.
The stock was trading at 110.80 pence each, down 6.6%, on Thursday.
For the six months to September, pretax profit dropped 76% to GBP7.2 million, while net operating income declined 21% to GBP70.6 million. Pretax profit is expected to be second-half weighted, CMC said, helped by some extra stockbroking revenue.
It is paying an interim dividend of 1.35 pence, more than halved from 2.98p a year prior.
The number of trades did rise, CMC said, by 14% to 34.9 million, and the value of trades was up 4% to GBP1.23 billion.
However, active clients fell 4% to 44,697 and revenue per active client was down 22% year-on-year to GBP1,413.
CMC previously had said its second quarter was hit by a "sustained period of low market volatility and range-bound markets", while increased regulation has also hampered operations.
"First half 2019 performance can be split into two distinct halves," said Chief Executive Peter Cruddas.
"Trading performance in the first quarter relative to the prior year was good, followed by a very challenging second quarter, one of the group's most difficult quarters in a number of years."
Since the start of CMC's second half, market activity and daily ranges have improved, and it is meeting expectations for a 20% full-year fall in contracts for difference and spreadbet net revenue.
CMC still expects full-year operating costs to rise year-on-year. It will keep evaluating the impact of regulatory changes going forward, something not yet fully clear.
Related Shares:
CMC Markets